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Hanau, 2 October, 2014
Evonik Capital
Markets Day 2014
Evonik Capital Markets Day
Agenda
Update on Evonik Group
10.30 – 11.30
Group Strategy
Poised for accelerated growth
Klaus Engel
(CEO)
Financial Strategy
Transforming accelerated growth into value
Ute Wolf
(CFO)
Q&A Session
Spotlight on Segment Resource Efficiency
11.30 – 11.45 Segment Resource Efficiency
Making the difference
Patrik Wohlhauser
(COO)
11.45– 12.30 Lunch Break
12.30 – 14.15
Small Group Sessions
Andreas Fischer
Business Line ‘Silica’
Invented to improve
Ralf Duessel
Business Line ‘Oil Additives’
Let it flow
Stefan Silber
Business Line ‘Coating Additives’
Adding Advantages
14.15 – 15.00 Visit of Silica technical application center
Page 2 2 October, 2014 | Evonik Capital Markets Day 2014 | Agenda
Evonik Capital
Markets Day 2014
Poised for
accelerated growth
Klaus Engel
Chief Executive Officer
Hanau, 2 October, 2014
Evonik is committed to deliver sustainable
profitable growth in specialty chemicals
to deliver sustainable growth
to increase profitability
Strategic and financial discipline:
Clear Commitment:
Our businesses are aligned towards:
Allocation of resources according to global megatrends and high growth opportunities
Value generation for our shareholders
Strengthening of leading market positions by development of tailor-made and innovative solutions together with clients
Proven track record in portfolio optimization
Solid balance sheet and disciplined use of funds
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 4
Table of contents
1 Trends in chemical industry
2 Evonik portfolio analysis
3 Strategies for accelerated growth
Page 5 2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy
Increasing challenges for
European chemicals industry
Demand growth mainly in emerging countries leading to further shift of
markets towards Asia
Product life cycles becoming shorter with an increasing commoditization of
product portfolios
Changing competitive structures due to Asian competition
Partly higher raw material and operating costs in Europe compared to other
regions (USA, Middle East)
High investment needs are no longer a barrier to entry
Growth
Competitive-
ness
Global chemicals industry expected to continue to outgrow global GDP,
but …
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 6
Table of contents
1 Trends in chemical industry
2 Evonik portfolio analysis
3 Strategies for accelerated growth
Page 7 2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy
Page 8
One of the
world leaders in
specialty chemicals
operating in markets
supported by
high-growth
megatrends
Assessment of Evonik’s position and portfolio:
More differentiated management needed
Current portfolio
includes
customer- &
solution-oriented
as well as
technology- &
product-focused
businesses
Management of
individual
businesses
not yet
differentiated
enough
To exploit maximum growth and
value potential, reorganization of
Group structure and further
evolution of portfolio necessary
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy
Evonik portfolio analysis regarding level of
specialization and growth & value potential
high
low
Growth &
value creation potential
low high
Level o
f sp
ecia
lizati
on
Consumer, Health &
Nutrition
Resource Efficiency
Specialty Materials
Differentiated management necessary - tailored to specific needs of individual businesses
Success factors for differentiation
• Dependence on raw materials
• Price-setting mechanisms
• Growth perspectives
• General market size
• Relative margins
• Threats of substitution
• Barriers to entry
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 9
Consumer, Health & Nutrition and
Resource Efficiency identified as areas of growth
Leading in customized, individual and innovation-driven solutions
Consumer, Health & Nutrition Resource Efficiency
• Niche markets with high margins, GDP+ growth rates and strong barriers to entry
• Low dependency on specific raw material cost development
• Joint R&D with customers and innovative solutions are of high importance
Focus on above-average profitable growth
High returns on invested capital
Concentrate growth capex on these areas
Expansion of businesses with selective acquisitions
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 10
Specialty Materials
• More product-driven, energy and raw material-intensive businesses
• Characterized by integrated technology platforms, efficient processes and
high market penetration
Specialty Materials managed with more
product-driven business approach in the future
Further efficiency and effectiveness enhancements
High cash returns
Investments and, where appropriate, alliances to secure
good market positions
Leading in product-driven activities
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 11
Differentiated management approach
supported by new holding structure
Site Services
Evonik Industries AG
Administrative Services
• Evonik Industries AG as new holding company focusses on strategic development and target setting
• Legally independent segments with increased degrees of entrepreneurial freedom to manage the
operational business
Consumer, Health &
Nutrition
Sales: €4.1 bn
Adj. EBITDA margin: 22%
ROCE: 34%
Resource
Efficiency
Sales: €3.8 bn
Adj. EBITDA margin: 21%
ROCE: 29%
Specialty
Materials
Sales: €3.9 bn
Adj. EBITDA margin: 11%
ROCE: 23%
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy
Pro-forma data as of fiscal year-end 2013 (before reallocation of corporate costs)
Page 12
Consumer, Health &
Nutrition
Personal Care
Animal Nutrition
(Methionine &
Bioproducts)
Health Care
Household Care
Interface &
Performance
Baby Care
Comfort & Insulation
Resource
Efficiency
Silica
Crosslinkers
Coating & Adhesive
Resins
Oil Additives Silanes
Specialty
Materials
Acrylic Monomers Performance
Intermediates
Agrochemicals &
Polymer Additives
Functional Solutions Acrylic Polymers
Seg
men
ts
Bu
sin
ess L
ines
Reclassification of single business lines
to allow more targeted management
Active Oxygens
High Performance
Polymers
CyPlus Technologies Coating Additives
Catalysts
Sales: €4.1 bn
Adj. EBITDA margin: 22%
ROCE: 34%
Sales: €3.8 bn
Adj. EBITDA margin: 21%
ROCE: 29%
Sales: €3.9 bn
Adj. EBITDA margin: 11%
ROCE: 23% KP
I‘s
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy
Pro-forma data as of fiscal year-end 2013 (before reallocation of corporate costs)
Page 13
Table of contents
1 Trends in chemical industry
2 Evonik portfolio analysis
3 Strategies for accelerated growth
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 14
Levers for sustainable value creation
• Differentiated focus of innovation activities according to
specific business needs
• Strong market & customer orientation as basis for
successful R&D
• Ramp-up of investment projects according to plan
• Taking advantage of flexibility in investment program
• Acquisitions as an additional route for value creation
Innovation
Organic growth
External growth
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 15
Differentiated focus of R&D activities
according to specific business needs
Resource
Efficiency
Consumer, Health
& Nutrition
Specialty
Materials
Gro
wth
E
ffic
ien
cy
Further strengthening of innovation efforts to expand
leading positions in growth segments, e.g.:
Securing market and cost positions by optimizing
production processes, e.g.:
Split of
R&D
expenses
• Broadening of raw material base, e.g. in C4 chain
• Development of new innovative catalysts for use in
Evonik production processes (e.g. in INA)
~80%
~20%
• Innovative solutions for animal nutrition beyond
amino acids
• Biosurfactants produced from renewable resources
• Innovative scratch-resistant coatings, e.g. for
automotive clear coats
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 16
Strong market & customer orientation
as basis for successful R&D
Strategic
research
Market- &
application-
oriented
research
~15%
R&D expenses
~85%
Market- & application-oriented research:
• Short- & medium-term projects
• Focus on existing markets and technologies
• Strong customer orientation and joint R&D collaborations:
High Performance Polymers: Supported by Evonik and based
on VESTAKEEP® PEEK, medical
device maker DiFusion developed
a spinal implant with FDA
approval
Oil Additives: New high quality, multi grade
hydraulic fluids from Total for
heavy machinery formulated with
DYNAVIS® technology
€394 m
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 17
Successful realization
of major investment projects
• On time and on budget after construction phase of three years
• Mechanical completion in July; start of production expected for Q4 2014
• Economic assumptions in line with initial expectations
• Good timing for additional volumes into an unchanged healthy market
• Global silica master plan:
Capacity expansions completed in USA, Thailand, Taiwan, India,
Germany, Spain and Turkey
• Targeted and selective expansion steps meeting strong customer
demand and being absorbed by the market
New world-scale methionine plant in Singapore
Targeted silica expansion steps as part of global master plan
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 18
Acquisitions as additional route
for value creation
• Acquisitions as additional growth route to create value:
• Accelerated entrance into adjacent markets and businesses
• Enable growth in asset-light businesses
• Strengthening of resilience against market or product cycles
• Value enhancement via synergies
• Strong financial profile offers flexibility for external growth
• Further growth and sharpening of specialty chemicals portfolio
in Consumer, Health & Nutrition / Resource Efficiency
• Potential driver for subsequent portfolio adjustments
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 19
Levers for sustainable value creation:
Ambitious long-term aspiration level
Innovation
Organic growth
External growth
Ambitious long-term aspiration level (by FY 2018)
~€18 bn Sales
>€3 bn adj. EBITDA
Attractive premium on cost of capital
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 20
Group Strategy
Backup
Reorganization of Business Lines
according to differentiated management approach
Reorganization from
Specialty Materials
to Resource Efficiency
High Performance
Polymers
• Products with high value
added and large portion of
customer-specific solutions
• Growth potential in the
fields of membranes, light-
weight construction,
medical technology and
alternative energy sources
Reorganization from
Consumer, Health & Nutrition
to Specialty Materials
Active
Oxygens
• Proprietary environmentally
friendly technology to
produce propylene oxide as
polyurethane precursor with
substantial cost advantages
(HPPO process)
• e.g. Polyamide12; PEEK • H2O2 for HPPO &
“traditional” applications
CyPlus
Technologies
• Joint management in
hydrocyanic acid platform
(together with MMA) in the
future
• e.g. cyanides for precious
metal mining
2 October, 2014 | Evonik Capital Markets Day 2014 | Group Strategy Page 23
Evonik Capital
Markets Day 2014
Transforming
accelerated growth
into value
Ute Wolf
Chief Financial Officer
Hanau, 2 October, 2014
Transforming accelerated growth into value
Continued focus on efficiency gains and cost savings
Disciplined approach in employment of funds
Ambitious long-term aspiration for delivering shareholder returns
Strong balance sheet and strict financial policy
2
3
1
~€500 m On Track 2.0 savings
up to €250 m Admin Excellence savings
Capex and M&A targeting accelerated
growth in specialty chemicals
~€18 bn Sales
>€3 bn adj. EBITDA
Attractive premium on cost of capital
Solid investment grade rating
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 25
Disciplined approach in employment of funds
Continued focus on efficiency gains and cost savings
Strong balance sheet and strict financial policy
2
3
~€500 m On Track 2.0 savings
up to €250 m Admin Excellence savings
Capex and M&A targeting accelerated
growth in specialty chemicals
Solid investment grade rating
1
~€18 bn Sales
>€3 bn adj. EBITDA
Attractive premium on cost of capital
Ambitious long-term aspiration for delivering shareholder returns
Transforming accelerated growth into value
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 26
Maximum value creation in specialty chemicals
• Attractive portfolio with high growth
opportunities
• Focus on specialty chemicals businesses
with above-average returns
• Disciplined and structured approach to
internal and external growth opportunities
• Track record in flexible project execution and
disciplined use of funds
Exploit maximum value potential in
specialty chemicals portfolio
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 27
Taking advantage of flexibility
in internal growth program
Consumer, Health & Nutrition
Resource Efficiency
Specialty Materials
Updated capex
2012 - 2016
Initial capex plan
2012 - 2016
Others
~€6 bn
up to €5.5 bn
Thereof growth investments ~€4 bn up to €3.5 bn
Thereof basis investments ~€2 bn ~€2 bn
Adjustment of growth
capex by ~13%
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy
1 Others: Services and Corporate / Others
1
Page 28
Several major projects finished
or close to completion
Segment Product
area Location
Capex
budget
Capex
spent1
Start-up (actual/expected)
Consumer,
Health &
Nutrition
Methionine Singapore >€500 m
Q4 2014
Personal &
home care
ingredients
China
Brazil >€100 m
Q1 2014
Q1 2015
Resource
Efficiency
Precipitated
silica
Global
master plan ~€100 m
Q1 2013 (Taiwan)
Q1 2014 (Thailand)
Q3 2014 (USA)
Isophorone/
Isophorone
diamine
China >€100 m Q2 2014
Specialty
Materials
H2O2 for
HPPO
China >€130 m Q2 2014
C4 Chain Germany &
Belgium >€250 m 2015
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy
1 As of September 2014
Page 29
Return to sustainable capex after 2016
Growth capex mainly allocated to
high-margin specialty chemicals businesses
Basis investments
Growth Capex
€800m - €900m
Consumer, Health
& Nutrition
Specialty
Materials
Resource
Efficiency
Maintenance
Small
investments
1
Growth capex by segment Sustainable annual capex level
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy
1 Basis investments defined as small investments (below €2.5 m focused on growth or efficiency improvements) and maintenance capex (maintenance and regulatory compliance investments)
Page 30
Allocation of
capex budget
Project
authorization
Construction &
Commissioning
Post completion
audit
Strategic
decision
• General decision on capex
budget and preferred fields of
investment
• Investment evaluation via
strategic and economic
project assessment
Structured planning and approval process
Constant review process on several layers
(Business Lines, Corporate functions, Executive Board, Supervisory Board)
• Discussion and decision based on presented
business plan
• In-depth risk assessment and agreement on risk
profile and on measures for risk reduction
• Detailed project monitoring (project volume, timing,
key value drivers)
• Analysis of risk assessment and derivation of lessons
learned
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 31
Diligent investment evaluation
to secure premium returns
Strategic and economic assessment
• Strategic assessment considering
competitive position, market
attractiveness and regional focus
• Economic assessment using
DCF-based investment evaluation
• Strict internal hurdle rates and
“competition” for scarce resources
Different return levels depending on project layout (e.g. greenfield or debottlenecking)
years
Business Integration &
Optimization
WACC
Sustainable
ROCE level
Engineering,
Procurement &
Construction
Start-up
phase
ROCE
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 32
Current cost of capital Depending on target size:
Current or updated cost of capital
according to changing business profile
Risk assessment in 5 categories … supplemented by further risk categories
• Transaction risks
• Integration risks
• Realization of potential
• Synergies
• …
Analysis timeframe:
Average depreciation period
(if appropriate, supplemented by life
cycle analysis)
Similar processes apply to external growth
Internal growth External growth
Analysis incl. perpetual annuity
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 33
Disciplined approach in employment of funds
Continued focus on efficiency gains and cost savings
Strong balance sheet and strict financial policy
3
1
~€500 m On Track 2.0 savings
up to €250 m Admin Excellence savings
Capex and M&A targeting accelerated
growth in specialty chemicals
Solid investment grade rating
2
~€18 bn Sales
>€3 bn adj. EBITDA
Attractive premium on cost of capital
Ambitious long-term aspiration for delivering shareholder returns
Transforming accelerated growth into value
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 34
Current efficiency programs well underway
Administrative functions
worldwide
Mainly on productivity improvements at our
sites and procurement
up to €250 m p.a.
by the end of 2016
(high retention rate expected)
~€500 m p.a. by 2016
(partly compensated by
increasing factor costs)
Focus
Expected
Savings
Phase 3 started,
first measures
in implementation
Measures for savings of almost €300 m
in execution and further ~€150 m
already backed by specific measures Status
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 35
Status of Admin Excellence measures
Admin Excellence: Phase 3 started
In project phase 2, more than 400 measures
were defined:
Structural improvements (~100 measures)
Process improvements (~200 measures)
Cease of services (~100 measures)
Project phase 3 initiated
First measures already in implementation, e.g.:
Streamlining of controlling and billing processes, e.g. harmonization of SAP platforms
Concentration of IT resources and infrastructure in one global competence center
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 36
Disciplined approach in employment of funds
Continued focus on efficiency gains and cost savings
Strong balance sheet and strict financial policy
1
~€500 m On Track 2.0 savings
up to €250 m Admin Excellence savings
Capex and M&A targeting accelerated
growth in specialty chemicals
Solid investment grade rating
2
3
~€18 bn Sales
>€3 bn adj. EBITDA
Attractive premium on cost of capital
Ambitious long-term aspiration for delivering shareholder returns
Transforming accelerated growth into value
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 37
Financial policy and strong balance sheet
provide flexibility
• Equity ratio of ~40%
• Net financial debt at only -€150 m on
30 June 2014
• STEAG proceeds of ~€570 m
received in September 2014
• Total leverage ratio1 at 2.1x
(incl. pensions) as of June 2014
Financial policy Strong balance sheet
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy
1 Total leverage defined as (net financial debt + unfunded pension obligations) / adj. EBITDA 2 Defined benefit obligations
Page 38
Disciplined approach in employment of funds
Continued focus on efficiency gains and cost savings
Strong balance sheet and strict financial policy
1
~€500 m On Track 2.0 savings
up to €250 m Admin Excellence savings
Capex and M&A targeting accelerated
growth in specialty chemicals
Solid investment grade rating
2
3
~€18 bn Sales
>€3 bn adj. EBITDA
Attractive premium on cost of capital
Ambitious long-term aspiration for delivering shareholder returns
Transforming accelerated growth into value
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 39
Dividend policy Dividend history (in €)
0.60
+11%
2013
1.00
2012
0.92
2011
0.91
2010
0.86
2009
0.69
2008
34% 56% Payout ratio
(in % of adj. EPS)
Two components of Evonik’s dividend policy:
1) Overarching target of dividend
continuity
2) additionally, targeted payout ratio:
~40% of adjusted net income
Compelling track record with regards to
dividend policy and shareholder returns
(also pre-listing)
Dividend payment for 2013 of 1.00 €
supported by significant cash inflows from
Real Estate divestment
Reliable dividend policy and attractive returns
37% 43%
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 40
Adj. EBITDA
2018
>€3 bn
Acquisitions /
Divestments
Growth
Investments
~€0.6 bn
Efficiency
programs (net)
Underlying
Growth Adj. EBITDA
2013
€2.0 bn
CAGR >8%
Aspiration level: Adj. EBITDA of >€3 bn
and an attractive premium on cost of capital
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 41
29.05.2013 | Evonik Kapitalmarktupdate Seite 42
Financial Strategy
Backup
Selected projects planned for 2015 & 2016
Segment Product area Location Capex
budget
Capex
spent1
Start-up (expected)
Status
Consumer,
Health &
Nutrition
Methionine:
Mepron® (for dairy cows)
AQUAVI® Met-Met (for aquaculture)
USA/
Belgium <50 m 2015 approved
Resource
Efficiency
Precipitated silica
Global
master
plan
~€100 m 2016
(Brazil) approved
Fumed Silica and Silanes China ~€100 m 2016 LOI for JV
signed
Further projects currently being planned, but not yet approved
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy
1 As of September 2014
Page 44
960
Sustainable
level
2016 2015 2014
~1,200
up to 1,400
2013
1,140
~1,500
2012
~1,300
Distribution of capex spending 2012 -2016
• ~€3.3 bn capex will
be spent end of 2014
• Target amount for
2015 and 2016:
up to €2.2 bn
• Return to sustainable
annual capex level of
€800 m - €900 m p.a.
after 2016 (at current
portfolio setup)
• Thereof ~€450 m
basis investments1
• Corresponding
D&A of ~€800 m
∑: ~ €3.3 bn ∑: up to €2.2 bn
Initial guidance Capex (in € million)
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 45
Maturity profile
Balanced maturity profile
0
200
400
600
800
1.000
2019 2018 2017 2016 2015 2014 2020
Undrawn credit
facilities
• Upcoming €750m bond maturity in
October 2014
• Unchanged policy to fund long-term
debt through Capital Markets:
• €3 bn debt issuance program
in place
• Additional flexibility from
STEAG proceeds (€570 m)
• Undrawn syndicated revolving credit
facilities as backup
Other debt
instruments
Bonds
(€ million)
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 46
Declining interest burden
• Further reduction of interest expense:
• Upcoming €750m / 7% bond
maturity on 14 October 2014
• Further CTA funding in 2014 and
2015 (€200 m each)
• Estimated adj. net interest expense
for 2014: ~€200 m
Expected development of adj. net interest expense
255
0
150
300
2017 2016 2015 2014
~200
2013
(€ million)
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 47
• Sale of remaining 49% stake in Energy
business STEAG to consortium of municipal
utility suppliers completed in Q3 2014
• Purchase price of ~€570 m received in
September
• Accounting treatment changed:
• Until Q2 2014: at equity in P&L (fixed
dividend of €6 m per quarter or €24 m p.a.)
and balance sheet
(as Evonik “Adjusted EBITDA” definition
includes at equity result, fixed dividend was
also part of Adjusted EBITDA; in segment
Corporate/Other)
• In Q3 2014 deconsolidation completed after
restatement to discontinued operations;
prior year figures (2013) and Q1/Q2 2014
will be restated accordingly
Sale of former Energy business STEAG
completed
General information
• Guaranteed dividend of €24 m (on FY basis!)
no longer included in adj. EBITDA & adj. EPS
• Instead in: “Income after tax from
discontinued operations”, this will include
(visible with deconsolidation in Q3 reporting):
• YTD dividend payments Jan.-Sept. (~ +€10 m)
• Negative accounting effect from
deconsolidation (mid double digit m € amount)
• Both effects not included in adj. EPS (as
excludes disc. op.), but in reported EPS
2 October, 2014 | Evonik Capital Markets Day 2014 | Financial Strategy Page 48
General information P&L / Balance Sheet effects
Evonik Capital
Markets Day 2014
”Making the difference” Segment Resource Efficiency
Patrik Wohlhauser
Chief Operating Officer
Hanau, 2 October, 2014
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Pro-forma data as of fiscal year-end 2013 (before reallocation of corporate costs)
Segment Resource Efficiency
Portfolio of highly profitable and resilient businesses
Page 50
Consumer,
Health & Nutrition Sales: ~€4.1 bn
Adj. EBITDA margin: ~22%
Resource Efficiency Sales: ~€3.8 bn
Adj. EBITDA margin: ~21%
Silica
(~25%)
Crosslinkers
(~10%)
Coating &
Adhesive Resins
(~10%)
Oil Additives
(~15%)
Coating
Additives
(~5%)
Silanes
(~10%)
Catalysts
(~5%)
Specialty Materials Sales: ~€3.9 bn
Adj. EBITDA margin: ~11% Seg
men
ts
Bu
sin
ess L
ines
Active
Oxygens
(~10%)
High Perf.
Polymers
(~10%)
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Portfolio management and growth investments
Actively sharpening specialty character of portfolio
Divestments
Acquisitions
Growth investments
Page 51
Adj.
EBITDA
margin
2010 2011 2012 2013 2014
19.8% 20.3% 21.2% 21.2% H1: 23.2%
• Silica master plan
• 5th isophorone chain
in Shanghai
• Oil Additives expansion
in Singapore
• Carbon Black
• Colorants
• hanse chemie
• Silbond
Data prior to 2015 restatements; excl. Carbon Black
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
2,998
2009
2,326
+7%
2013
3,084
2012
3,131
2011
3,234
2010
655663655
593
414
+12%
2013 2012 2011 2010 2009
17.8 19.8 20.3 21.2 21.2
Sales (€ m) Adj. EBITDA (€ m) and margin (%)
Strong financial track record
Constantly increasing operating margin
Page 52
Data prior to 2015 restatements; excl. Carbon Black
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Global operations
Increasing sales share in markets outside Europe
driven by growth investments
Page 53
Europe ~50% • ~ 3,600 employees
• 23 sites
• 8 R&D centers
• Main sites:
Antwerp, Hanau,
Marl, Darmstadt
Americas
~20%
Asia1
• ~700 employees
• 19 sites
• 3 R&D centers
• Main sites: Mobile,
Parsippany, Sao Paulo
~30%
• ~1,600 employees
• 36 sites
• 6 R&D centers
• Main sites: Shanghai, Singapore Data prior to 2015 restatements; excl. Carbon Black 1 Incl. Middle East and Africa
(Sales split by region
in % of total segment sales
and expected development)
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Sales 2013
~€3 bn
End market split & growth rates
Attractive and high-growth end markets
Automotive,
transportation &
machinery
Coatings,
paintings &
printing
Construction
Other
Page 54
Selected market growth rates:
Low rolling resistance tires: ~10%
Light vehicle tires: ~5%
Viscosity modifiers: ~5%
~35%
~20%
~10%
~35%
Data prior to 2015 restatements, excluding Carbon Black
Expected end markets growth rates p.a.; sources: Industry studies; Evonik estimates
Selected market growth rates:
Matting agents: ~3-5%
Specialty Additives & Resins: ~6%
Selected market growth rates:
Coatings & industrial flooring: ~4-5%
Selected market growth rates:
Lead acid batteries: ~5%
Feed: ~4-6%
Industrial & Petrochemicals,
Life Science and Polyolefin
Catalysts: ~4-5%
High Performance Composites:
~5-6%
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Innovative solutions for the automotive industry
Page 55
Fuel savings and
emissions reduction
Lightweight
design
Surface
technologies
Low rolling resistance tires1
with silica-silane reinforcing
system reduce fuel
consumption
by up to
Crosslinkers enable the
production of robust
thermoset composite
material, used esp. for light-
weight vehicles, which are
lighter2 by up to
Silane modified hybrid
crosslinkers enable scratch-
resistant automotive clear-
coats, reducing loss of gloss
and refinishing needs by3
20 % 15 % 8 %
1 EU label category A vs category G tires 2 Body in White – concept plus some exterior parts in composite versus conventional metal technology (internal study) 3 Industry typical scratch resistance test comparing current technology vs silane modified hybrid technology after 1500 hours accelerated weathering
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Crosslinkers
Crosslinkers enable
composite materials
used in large rotor blades
of modern on- and
offshore wind turbines.
of today´s wind
blades are based
on this technology.
Enabling the development and construction of
bigger and more efficient wind turbines
Page 56
Silica
Silicas improve properties of high-performance
adhesives giving greater stability to large rotor
blades with a length of up to
Oil Additives
Additives for wind turbine
gear oils deliver reliability,
extended service life and
reduce “oil cost” by up to
Coating Additives
Silicone Epoxy Resins enable excellent
anti-corrosion coatings for heavy duty
applications with thinner films.
20 %
44 % 75 m
80 %
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency Page 57
Common theme for the segment
“Small volume, big impact!”
• Focus on performance-impacting
and value-driving components
• Minor share of cost in most end
products
• High degree of customer intimacy
• Low risk of substitution
• Increased pricing power
(value-based pricing)
• Long-term customer relationships
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency Page 58
Key success factors
High customer intimacy through delivering
tailor-made, mission-critical solutions
Customer proximity and
strategic partnership
Performance-impacting
and value-driving
solutions
Technology platforms
and core competencies
With/without Evonik product • Silicon platform
• Isophorone chain
• Siloxanes and polyether
technology platforms
• Industry teams
• Innovation-driven and
application know-how
• Focus on technical service
• Long-term relationships
with industry leaders
• Strategic alignment on top
management level
• Customer- and market-
driven innovation projects
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Targeted investment projects
to continue profitable growth track record
Page 59
New silica plant in Brasil
• Serve attractive South-American market with
locally produced silica
• First plant for highly dispersible silica in
South America
New isophorone chain in Shanghai
• Regional diversification of asset base with
five fully integrated isophorone chains in
Europe, US and now Asia
• Strengthen leading market position
Oil Additives expansion in Singapore
• Capacity increase needed to serve growing
demand
• Market growth strongest in Asia
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Continued strong
sales growth at GDP+ …
… at continued attractive
EBITDA margin level of 20+
Resource Efficiency has set the course
to continue the successful growth story
Page 60
Successful
track record
Clear
growth focus
GDP+
volume growth
Megatrend
orientation
Margin
enhancement
Active portfolio
management
Sustainable
long-term growth
Customer proximity
and strategic
partnership
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Resource Efficiency
Reorganization of group structure
Greater entrepreneurial independence and more
targeted management for Resource Efficiency
Page 61
Management Team Segment Resource Efficiency
Dr. Claus Rettig
Chairman
Dr. Johannes Ohmer
Managing Director
Clear
growth
focus
• Above average growth-rates
• High returns on invested capital
• Dedicated resource allocation
• Differentiated management of businesses tailored to specific needs
Simone Hildmann
Head of Finance
“Invented to improve”
Business Line Silica
Evonik Capital Markets Day 2014
Andreas Fischer
Head of BL Silica
Hanau, 2 October, 2014
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Se
gm
en
t
Resource Efficiency
Sales: ~€3.8 bn
Adj. EBITDA / margin: ~€800 m / ~21%
Silanes (~10%)
Catalysts (~5%)
Bu
sin
es
s
Lin
es
Silica
Strong pillar in Evonik’s specialty chemicals portfolio
Page 64
Silica (~25% of segment sales)
Active Oxygens (~10%)
Coating & Adhesive Resins
(~10%)
Oil Additives (~15%)
High Performance Polymers
(~10%)
Crosslinkers (~10%)
Coating Additives (~5%)
Pro-forma data as of fiscal year-end 2013 (before reallocation of corporate costs)
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Silica improve properties of adhesives, giving
greater stability to large rotor blades
High silica content leads to low rolling
resistance and excellent traction in tires
Silica
Tailored product properties for environmentally
friendly and energy efficient solutions
We help you save energy. We empower wind energy.
We make resources available
for future generations. We make health affordable.
Silica improve free flow in solid and anti-settling
in liquid agrochemical formulations
Silica make modern tablet and capsule
manufacturing processes more efficient
Page 65
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Table of contents
Page 66
1 Facts & figures
2 Key success factors
3 Targeted investment strategy
4 Summary
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Top
#1
Supplier for
fumed and precipitated
silica
282 R&D and Applied
Technology experts
32
Industries served by
industry experts
20 Production sites with
global coverage
>100 Products to solve
customer challenges
Business at a glance
Leading silica supplier with full coverage
Page 67
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Particle design: Same weight of 25 g,
different volumes of silica products
BL Silica BL Silanes
Sodium silicate Precipitated silica
Silanes 1 Fumed silica
Fumed metal
oxides
Silicon metal
• Synthetic amorphous silica (SAS) with high surface and low density
• Particle size and structure, as well as surface characteristics the main differences between the two
technologies – further optimization via particle design possible
• Available in powder form, as granules or dispersions
Product portfolio capabilities
From sand to a broad range of
tailor-made silica solutions
Sand
Characteristics
Page 68
25 g
25 g 25 g
Sand Precip. Silica Fumed silica
1 Chloro-, Organo- & Rubber-Silanes
Platform
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Technological capabilities
Outstanding expertise in designing
organic particles and surface properties
• Unique product portfolio of larger volume
products as well as customized solutions
• Broad commercialized technology base
• Long-standing in-house cooperation within
Resource Efficiency segment
• Worldwide setup of Research and Applied
Technology Centers Research & Development
Applied Technology labs
Market differentiation based on outstanding technological competences
to design tailor-made particles and product properties
Page 69
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Market focus
Well-balanced end market split with exposure to
attractive growth markets
Sources: 1 Evonik estimate, LMC; 2 Evonik estimate, precipitated silica and fumed metal oxides; 3 Selective examples only
30%
16%
13%
37%
4%
Market Size
2013
~€3 bn2)
Lead acid
batteries 5%2
Low rolling
resistance tires 10%1
Global light vehicle tires 5%1
Matting agents 3-5%2
Feed 4-6%2
Silicone 5-6%2
% p.a. Sales split by end market (2013) and expected market growth (2014 – 2019)3
Automotive, transportation & machinery
Coatings, paintings and printing Plastics & rubber
Food, feed & beverages
Page 70
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Applications and functionalities
Broad application spectrum in diversified end markets
• Reduced rolling resistance of “Green Tires”
• Increased tensile strength and hardness
of e.g. belts
Tire and MRG1
• Tear resistance in silicones
• Flow control of bonding pastes in windmill
production
Silicones and Adhesives
Coatings • Matting agent of choice for waterborne coatings
• Rheology control additive in automotive coatings
• White extender for paints
Applications Functionality examples
Health care and Home care
• Tableting aid and carrier for drugs
• UV-filter for suncreams
• Thickening agent for toothpaste
Agriculture, Food and Feed
• Anti-settling in liquid agrochemicals
• Carrier for liquid ingredients (e.g. vitamins)
• Anti-caking during food processing
Page 71
1 Mechanical rubber goods
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Table of contents
Page 72
1 Facts & figures
2 Key success factors
3 Targeted investment strategy
4 Summary
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
• Precipitated silica and
fumed metal oxides
• Broad variety of
specialties
• Options to customize
• Future winner concept
and industry teams
• Strong brands
• (Technical) service
orientation
• Production platforms in
all major regions
• High quality standards
• Global coordination and
cross-regional support
• Unbiased advising
• Cross-selling potential
• Innovation leader
• Long-term relationships
with key customers
• Communication and
support on par level
• Preferred partner for
global businesses
• Supply security
• Customer proximity
Key success factors
Tailor-made solutions based on
deep understanding of customers’ needs
Strong
customer intimacy
Global
production network
Broad product &
industry portfolio
= = =
Page 73
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Spotlight food and feed
Broad portfolio enables to act as advisor
for the best customer solution
Silica as free flow aid
in food and feed
processing
Customer specific
formulations
Industry needs
Evonik offering
Fumed and precipitated silica products manufactured
under food additive regulations (HACCP)1
Industry experts and applied technology team
promotes both products in parallel
Customer gets an objective advise on the optimal
solution for his requirements
1 Hazard analysis and critical control points
Page 74
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Strategic alignment on top management level
Global key account managers as internal
voice of the customer
Customer and market driven innovation
projects incl. joint innovation projects
Handling and applied technology experts to
solve process challenges
Global quality standards and production
network to support regional expansion
Just-in-time deliveries and full supply security
Consistent quality with growing requirements
Easy-to-disperse products for fast processing
Local supply with global quality also in
emerging growth markets
Spotlight tire industry
Customer intimacy has to be re-earned day per day
Industry needs
Evonik offering
Page 75
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
• Global production network with
presence in all major silica markets
• Combination of
World scale production plants to
realize economies of scale
Medium-sized plants close to
customers
Flexible setup for further
expansion steps
• Global marketing & sales
organization with ~180 employees and
presence in 96 countries
• Superior process technology due to
integrated silica-silane production
platform
Global production network
Global production platform combined with
regional customer proximity
20 silica plants globally
Evonik fumed silica plants
Evonik precipitated silica plants
Chester,
USA
Wesseling,
Germany
Evonik colloidal silica plants
( )
Xuzhou,
China
Yokkaichi
Japan
Americana,
Brazil1
( ) Planned
Rheinfelden,
Germany
Page 76
1 Under construction
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Table of contents
Page 77
1 Facts & figures
2 Key success factors
3 Targeted investment strategy
4 Summary
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Targeted investment strategy
Flexible and stepwise approach
for expansion of global silica platform
Diluting fixed costs by
stepwise expansion
of existing sites
Tapping strong growth markets
by new production facilities
Partnering with strong local
players to achieve beneficial
cost position
Selective investment approach depending on the situation in the respective markets
Example:
Chester, USA
Example:
Americana, Brazil
Example:
Xuzhou, China
1 2 3
Regular review of investment decisions according to market developments
Page 78
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Stepwise expansion of existing sites
Example: Chester (USA)
1
• Existing Evonik site since 1984
• Stepwise expansions tripled capacity until today
• Broad production platform, ranging from larger
volume rubber grades to high end matting agents
Chester, Pa., September 9, 2014
Latest example:
• Additional 20,000 mt capacity for
precipitated silica on-stream in Q3
2014
• Strengthens presence in NAFTA
market
Page 79
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
• First production plant for highly dispersible
(HD) silica in South America
• Tapping Latin American growth markets by
new production facility currently mainly served
by imports
• Attractive specialty segments in South
America's food, feed, and agricultural
industries
• Tire labelling in Brazil from 2016 onwards
as additional growth driver
• Investment: mid-double-digit million € range
• Plant scheduled to go on stream in 2016
New production facilities
Example: Americana (Brazil)
2
Page 80
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
• New site for fumed silica and ultrapure
silicon tetrachloride in China
• Attractive cost position via fence-to-
fence partnership with leading silicon
producer (CGL)
• >20,000 mt total capacity to be built in
Xuzhou
• LOI Evonik-CGL signed in July 2014
• Commissioning scheduled for 2016
• Basic engineering has started
Partnering with strong local players
Example: Xuzhou (China)
Ultra-pure
silicon tetrachloride:
Fiber optics needed
to expand China’s
broadband networks
(optic fiber cable)
Fumed silica:
Silicone industry,
adhesives & sealants,
gel batteries (E-bikes)
Main applications
3
Page 81
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Table of contents
Page 82
1 Facts & figures
2 Key success factors
3 Targeted investment strategy
4 Summary
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Summary
Silica well-positioned to write the story of tomorrow
• Leading silica producer with superior portfolio of larger
volume products and specialties
• Outstanding particle design competence as technical
differentiator
• Well-balanced end market split in attractive growth
markets
• High customer intimacy and innovation partnerships
with industry leaders
• Flexible and stepwise approach for expansion of
unrivaled global silica platform
Page 83
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
“Invented to improve”
Business Line Silica
Backup
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Facts & figures
Largest producer of amorphous silica
with more than 70 years experience
#1 #1
Main competitors
Cabot
Wacker
Tokuyama
Main competitors
Solvay
JM Huber
PPG
OSC
Precipitated Silica Fumed Silica
Evonik Evonik
24%
17%
• Close customer relationships, esp. with tire
manufacturers
• Broad range of end markets with strong
established brands
• Ongoing global expansion program
• Broadest product offering
• High brand awareness
• Strong process and applied technology
(> 70 years of experience)
• Fence-to-Fence partnerships
Page 86
October 2, 2014 | Evonik Capital Markets Day 2014 | Silica
Silica master plan supports #1 position globally
Capacity expansion steps since 2010
Expansion steps1
Asia
~30%
• Evonik precipitated silica capacity
expansion by ~30% over last 4 years
• Targeted and selective expansion
steps across all major regions
• Meeting strong customer demand
520
400
2010
Capacity
in kt p.a.
2014E
• India 2011/2012
• Taiwan 2011/2012
• Thailand 2014
• Japan 20152
• USA 2014
• Brazil 20162
• Turkey
• Germany 2010 – 2012
• Spain
Americas
Europe
Page 87
1 Date of commissioning 2 Under construction
Evonik Capital Markets Day 2014
Ralf Duessel
Head of BL Oil Additives
Hanau, 2 October, 2014
“Let it flow.”
Business Line
Oil Additives
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Pro-forma data as of fiscal year-end 2013 (before reallocation of corporate costs)
Positioning within Resource Efficiency
Oil Additives as important contributor to portfolio
of resource efficient customer solutions
Page 89
Se
gm
en
t
Resource Efficiency
Sales: ~€3.8 bn
Adj. EBITDA / margin: ~€800 m / ~21%
Silica (~25% of segment sales)
Silanes (~10%)
Catalysts (~5%)
Bu
sin
es
s L
ine
s
Crosslinkers (~10%)
Coatings & Adhesive Resins
(~10%)
Coating Additives (~5%)
Active Oxygens (~10%)
Oil Additives (~15%)
High Performance Polymers
(~10%)
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Oil Additives at a glance
Leading global supplier of unique, high performance
lubricant, fuel and refinery additives
Page 90
5% R&D ratio (incl. technical
service)
GDP++ annual sales growth
over last 10 years
25 largest lubricant
companies are all Evonik
customers
75% diversity in management
positions
>5 million tons of CO2 emissions
avoided through the use of
our technologies
#1 supplier of resource
efficient viscosity modifiers
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Table of contents
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
Page 91
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
~€90 bn
2
11
VII /
PPD
Performance
Packages
Base
Oils
35 48
Industrial Auto
Facts & figures
Well positioned in lubricant additives market
Lubricant market (in € bn)
Lubricant
Additives
market
Sales
2020
Sales
2012
+1.7%
Oil Additives
Resource
Efficiency
Push
GDP++
Main competitors
#1-2
~€2 bn
Competitors
Viscosity
Modifiers
Market growth
Page 92
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Facts & figures
Integrated supply chain with high customer intimacy
and OEM reputation
Performance
Packages
End-user Blender Crude
Chemicals
Base Oils
Additives
Retailer
OEMs
Sourcing
Marketing
Sales
• Integrated global supply chain and production network
• Technical support for customers, own R&D and product development capabilities
• Downstream OEM and end-user relationships and reputation
Integrated supply chain with downstream relationships
Page 93
Customers
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives Page 94
Facts & figures
Enabling our customers to improve resource
efficiency of their products
A DYNAVIS® technology formulated
hydraulic fluid saves up to
with heavy stone milling.
DRIVON™ technology for transmission
and engine oils can save the value chain
up to per car.
NUFLUX™ technology for wind turbine
gear oils deliver reliability, extended
service life and reduce “oil cost” by up to
20%
€ 600
25%
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Aviation: hydraulic fluids with
improved fire resistance, reliability
and safety.
Wind turbines: Gear oils for
maximized energy yield and
minimized wear in gearboxes.
Automotive: engine oil additives
contribute to fuel economy, engine
cleanliness and reduced wear.
Main products Application examples
Viscosity Index Improvers (VII)
Facts & figures
Broad product portfolio improving friction, wear and
flow performance of base fluids
Pour Point Depressants (PPD)
Cold Flow Improvers for Biodiesel
Synthetic Base Fluids
Heavy machinery: additives in
hydraulic fluids improve cold
temperature performance and fuel
economy.
Page 95
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Table of contents
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
Page 96
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives Page 97
Key success factors
Tailor-made solutions based on
deep understanding of customers’ needs
• 5 production plants
around the globe
• 5 technical service
facilities
• Sales force in >35
countries
• Strong Key Account
Management
• Core competencies
include:
• Deep understanding of
applications
• Hydrocarbon fluid
viscometrics, rheology
and tribology
• Polymer design
• Novel technologies for
formulation components
and base fluids
• Tailor-made products
improve friction, wear
and flow performance
• Application- and
solution-driven
• Strong focus on
technical service
• Strong brand positioning
Global reach Technology leadership Customer intimacy
Production & Labs
Total
Exxon Mobil
Liebherr Construction machinery
fair attendance
Solutions to
customers
Co-marketing
partnerships
Train the
„evangelists“
Build brand
awareness
Chevron
Schaeffer
Putzmeister
CNH
Demand pull
DYNAVIS promotion Supply push
marketing toolbox
Caterpillar
Technical selling
Field trial
validation
Oil formulator Construction equipment OEM Lube distributor Fleet owners / contractors
Marketing
Toolbox
Sales support
and POS Material
Customer intimacy
Example “DYNAVIS inside”
Page 98 2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Table of contents
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
Page 99
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Customers and competitors
are focusing on efficiency and
sustainability
Efficient lubricants will also play
a more critical role to enable the
use of renewable energies
Efficiency increases are key to
mitigate increase in emissions
meet future governmental
emission limits
prolong lubricant life
Page 100
Future growth drivers
Efficiency increases important criteria
for lubricant customers
Resource
efficient
lubricants
require higher
concentrations
of performance
additives
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2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives Page 101
Future growth drivers
Broadening the scope of our portfolio
Fluid Interface
Systems
Core
Markets
Technology
Adjacent technologies
Adjacent markets
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Table of contents
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
Page 102
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Oil Additives
Summary
Oil Additives well positioned to drive
sustainable and profitable growth
Page 103
• Leading global supplier of unique, high performance
lubricant, fuel and refinery additives
• Integrated supply chain with high customer intimacy and
OEM reputation
• Tailor-made solutions based on deep understanding of
customers’ needs
• Well positioned to drive future growth by
• Resource Efficiency push in existing market,
• and broadening of the portfolio into adjacent markets
and technologies
Placeholder BL picture
“Adding Advantages”
Business Line
Coating Additives
Stefan Silber
Head of BL Coating Additives
Hanau, 2 October, 2014
Evonik Capital Markets Day 2014
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Se
gm
en
t
Resource Efficiency
Sales: ~€3.8 bn
Adj. EBITDA / margin: ~ €800 m / ~21%
Silica (~25% of segment sales)
Silanes (~10%)
Catalysts (~5%)
Bu
sin
es
s L
ine
s
Positioning within Evonik
Coating Additives as “customer enabler”
for resource-efficient solutions
Crosslinkers (~10%)
Coating & Adhesive Resins
(~10%)
Oil Additives (~15%)
Page 106
Active Oxygens (~10%)
Coating Additives (~5%)
High Performance Polymers
(~10%)
Pro-forma data as of fiscal year-end 2013 (before reallocation of corporate costs)
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Table of contents
Page 107
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Top
#2 supplier for
high performance additives
and
specialty resins
>450 tailor-made products for
broad spectrum of
applications in diversified
end markets
GDP++
annual sales growth
over last 10 years
25 innovation partnerships
with leading customers
>5% R&D ratio
Page 108
Business at a glance
Leading supplier for high performance additives
and specialty resins
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Global customer access
Customer service labs in all major regions
Page 109
Production sites Customer service labs Innovation centers
Marl
Essen
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Market Split: Coatings & Inks [€ bn] Coatings & Inks Ingredients Market [€ bn]
Niche positioning in coatings & inks market
Attractive “low-volume – high impact” business
Specialty
Additives
& Resins
~1.5
Pigments/
Fillers
Solvents Standard/
Commodity
Resins &
Additives
Total
Ingredients
~50
CAGR 2013-2018:
~6%
Formulation
Ingredients
Coatings &
inks ~100
Relevant
market
Main competitors:
CAGR 2013-2018:
~4%
Page 110
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Major Applications and Functionalities
Broad application spectrum in diversified end markets
• Water protection of façade paints
• Defoaming of wall paints
Architectural Paints
• Improved substrate wetting on packaging materials
• Gloss increase of packaging inks for better
appearance
Printing Inks
Wood Coatings • Stronger anti-blocking properties
• Increased scratch resistance of parquet coatings
Applications Functionality examples
Pigment Concentrates
• Increased color strength of pigment concentrates for
color rich paints
Industrial & Automotive
Coatings
• Longer lasting durability of industrial & automotive
coatings, e.g. by better chemical and weathering
resistance
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Application examples
Innovative and mission-critical solutions with
high value-added for the end customer
Defoaming Anti-Graffiti protection
Water protection Scratch resistance
External façade paints
are well protected
against rain and
humidity
Defoamers
eliminate foam in
the coating film
Use of anti-graffiti
additives results in
strong protection of
coatings against
vandalism from
sprayers
Nanocomposites
improve scratch
resistance of
coatings
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Table of contents
Page 113
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
• Global technical service
with labs in all major
regions
• R&D hubs in Europe and
Asia focus on resource
efficient products, e.g. for
waterborne coatings
• High throughput
experimentation as
powerful support tool for
R&D
Page 114
Key success factors
Tailor-made solutions based on
deep understanding of customers’ needs
• Strategic partner to key
and focus accounts
• Dedicated, cross regional
teams for global accounts
• Joint development
projects for individual and
customer specific
solutions
• Broad technology base
(siloxanes & polyethers)
• Integrated production
technology
• Capable to produce
unique and individual
products
• Attractive economies of
scale in R&D, production
and logistics
Partnering with customers Strong technology base Extensive R&D, application
& formulation know how
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives Page 115
Extensive application & formulation know how
Customized solutions for coatings & inks
Based on its extensive know how in surface chemistry,
Coating Additives delivers individual solutions to various issues of coatings and inks
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Phase 1:
Initiation
Phase 2:
Development
Phase 3:
Application
testing
Phase 4:
Business
Activities
• Lab and field
performance tests
• Detailed feedback
and discussion of
test results
• Tests at end
customers
• Final approval
• Final negotiations
• Start of production
• Delivery to the
customer
• Regular dialogue
with customers;
discussion of future
projects
• Excl. development
agreements
• Kick-off develop-
ment project
• Discussion of
performance and
other specifications
• Development of
new structures and
products based on
specifications
Customer
functions
Purchasing;
Management Purchasing;
Management R&D; technical service
Evonik
functions
Key Account Mgmt.;
BL Management Key Account Mgmt.;
BL Management R&D; technical service
Iterative, multi step process
Partnering with customers
Joint development projects as key element of
innovation partnership approach
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives Page 117
Strong technology base
Capable to produce unique and individual products
at attractive economies of scale
Interface &
Performance
Personal Care
Silane & Siloxane
Precursors
Epoxides
Reactive
Siloxanes
Polyethers
Organo-modified
Siloxanes
Formulations &
Application Technology
Comfort &
Insulation
Production Platform
R&D Platform Logistic Platform
Solution-to-Customer Business System
(Consumer Specialties)
Coating
Additives
(Consumer
Specialties) (Consumer Specialties)
Coating Additives embedded in Evonik’s ORGANO SILICONE PLATFORM
that feeds four Evonik business lines:
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Table of contents
Page 118
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
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2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Future growth drivers
With its portfolio, Coating Additives addresses
several important trends in coatings & inks market
Trends
and
growth
rates
Solution
examples
from
Coating
Additives
Environmentally
friendly coatings & inks
Modular coating
manufacturing
Coatings with
increased durability
5% (waterborne paints)
7% (UV cured coatings)
7 – 8 % (universal
grinding systems)
6% (High solid anti
corrosion coatings)
TEGO® Foamex:
High performance foam
control agents
TEGO® Dispers:
Dispersants for universal
pigment concentrates
SILIKOPON®:
Ultra high solid Si-hybrid
resins for long-lasting
coatings
Coating Additives offers innovative solutions
to address current trends in the coatings industry
Page 119
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Table of contents
Page 120
1 Facts & figures
2 Key success factors
3 Future growth drivers
4 Summary
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives
Summary
Coating Additives has set the course to continue the
successful growth story in the future
• Leading global position with broad and attractive
portfolio
• Mission-critical solutions with high value-added for
end customers
• Close strategic customer relations and innovation
partnerships
• Tailor-made solutions based on deep understanding
of customers’ needs
• Strong growth opportunities by addressing current
trends in the coatings industry
Page 121
Diese Markierung nach erfolgreicher Anwendung dieser Master löschen.
2 October, 2014 | Evonik Capital Markets Day 2014 | Coating Additives